Euro down on German business confidence

Tokyo - The euro extended its losses against the dollar in Asia on Monday after hitting a three-month low last week in response to a soft reading in an index of German business confidence.

In midday Tokyo trading, the euro fetched $1.3618 and 138.83 yen, down from $1.3632 and 138.91 in New York on Friday.

The dollar rose to 101.94 yen from 101.92 in New York Friday and is well up from the 101.72 yen seen also on Friday in Tokyo.

Germany's Ifo business climate index for May dropped to 110.4 from 111.2, data showed Friday, after a gain the previous month, underscoring ongoing concerns about the the European economy.

Markets are growing increasingly convinced that the European Central Bank will take steps to loosen monetary conditions at its June meeting, in turn putting downward pressure on the euro.

ECB chief Mario Draghi is scheduled to speak at a conference later in the day.

“Markets will be looking for more clues as to what may be on offer following next Thursday's ECB council meeting,” National Australia Bank said.

A strong showing by nationalist and anti-European Union parties in EU parliamentary elections may also be weighing on the euro, it added.

“The reality is that these results - in France especially - won't mean a whole lot in practice but optically it's an obvious pretext for some pressure on the euro and the pound,” NAB said.

It also said the dollar rose the yen after Bank of Japan governor Haruhiko Kuroda told the Wall Street Journal that the Japanese currency was “still quite strong”, and added that Tokyo needs to do more in its fight to boost growth and raise inflation. - Sapa-AFP